Barriers to exit

Updated: Aug 20, 2021

Obstacles that make it costly for a firm to exit a market. Barriers to exit intensify competition in a market because incumbent firms have little choice but to ‘stay and fight’. Examples of barriers to exit include the costs involved with the write-off of assets, redundancy payments, penalties for terminating contracts, and the loss of reputation and goodwill.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.